When Is It Appropriate to Include Sunk Costs in the Evaluation

question 90

Multiple Choice

When is it appropriate to include sunk costs in the evaluation of a project?

• A)include sunk costs when they are relatively large
• B)include sunk costs if it improves the project's NPV
• C)include sunk costs if they are considered to be overhead costs
• D)it is never appropriate to include sunk costs

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Definitions:

Symbolic Interactionism

A theoretical framework in sociology that emphasizes the role of symbols and language as core elements of human interaction and society.

Meaning

The significance or understanding attributed to something, such as a word, symbol, or event.

Interaction

The process through which people affect or influence each other's feelings, thoughts, or actions.

Postmodernist

Relating to a late-20th-century movement characterized by broad skepticism, subjectivism, or relativism; a general suspicion of reason, and an acute sensitivity to the role of ideology in asserting and maintaining political and economic power.